Friday, May 15, 2015

Core Response #5: The Second-Screen Experience and Venture Capital Cyclicality

One particularly interesting transformation of television as incited by Henry Jenkins' concept of digital media convergence is the second-screen experience. For those unfamiliar, the "second screen" refers to the screen of a mobile phone or digital device; applications are used on these devices during the airing of television shows, in a theoretical attempt to further engage viewers with what they're watching. These applications first started enjoying popularity and media attention in 2010, popularity that mounted in significant fashion within the next two years and enjoyed a subsequent surge in venture capital investments. App GetGlue, leading the pack in terms of userbase and engagement, made almost $25 million through venture capital coming from media and tech conglomerates. Many of the corporations that once pushed them, however, quickly disavowed them for several reasons, claiming that users found them "annoying" [1] or that they were a "distraction" that didn't actually augment the act of watching television in a significant way. Most of these applications attempted to incentivize their use in an attempt to maintain their userbase, but invariably went extinct.

A strange reoccurence of this seemingly-failed entertainment paradigm has emerged once again with the arrival of Viggle. Viggle is another second-screen application that presents itself, first and foremost, on the basis of the rewards it can offer to users for checking in to television programs. After accruing a certain amount of points - one point per minute of television watched, "bonuses" excluded - users can spend those point on anything ranging from a $5 Starbucks gift card to a trip to a taping of the finale of The Voice. Services like these are meant to function as databases that can provide content creators and distributors with more sophisticated, tracked information about user demographics and their consumption habits, which presumably inform the decisions of those creators/distributors in deciding what to produce. Despite the failure of the first round of second-screen applications - GetGlue shuttered barely six months ago, for instance - there has been another noteworthy surge in investor confidence around Viggle. This article notes a massive uptick in Viggle's stock value that surrounds its increase in userbase, despite noting that they've posted $20 million losses in the last quarter alone. Divine there notes that the shortsightedness of these investments, acting in spite of a financial calculus that should otherwise dictate their decisions, follows a similar "line of logic" to the dot-com bust that occurred from 1999 to 2001. Is user engagement really a reliable metric for determining whether or not to throw tens of millions of dollars at a relatively new app? Can television monetize sufficiently enough to support both itself and the venture capital that relies on its frequency of content production?

Works Cited


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